Use the Trade Weapon Against Terrorism

ByJoe Barton. Joe Barton, a congressman from Texas, serves on the Committee on Energy and Commerce.October 25, 1989

TERRORISM around the world is a grim and senseless reality that must be addressed. Most recently, a French DC-10 airliner was apparently blown up by a terrorist bomb. This barbaric act killed 171 people, including the wife of the US Ambassador to Chad and six other Americans. This is the third jumbo jet destroyed by terrorists in four years, with a total cost in lives of 770.

While American hostages continue to be held, and sometimes tortured and killed, ships from countries aiding and sponsoring terrorism arrive at our ports each week bringing oil, rugs, jewelry, dyes, tobacco, and other products. These goods are allowed into America at preferential tariff rates, because under current American law Libya, Iran, Iraq, and Syria enjoy Most Favored Nation (MFN) trade status. Terrorism has repeatedly been linked to these countries.

I have introduced legislation - the Anti-Terrorism Act of 1989 - which would address, through economic means, this obvious loophole in the United States' anti-terrorism strategy. This measure, HR 1515, would do three things: (1) require the Secretary of State to maintain a list of countries that support terrorism; (2) deny trade preferences to any country on the list, and (3) grant authority to the president to waive this proscription if he finds it is not in the national interest.

For example, if HR 1515 was enacted into law today and the State Department denied MFN status to Iran or any other country, that country could not again obtain MFN status until the department believed it was no longer sponsoring terrorism.

The legislation is designed to be flexible, taking into account changes in countries' attitudes towards terrorism. Denial of MFN status would not be permanent.

Iran's spiritual leader, Ayatollah Ali Khamenei, has stated that the Iranian government was ``ready to use its maximum influence for the release of all the hostages,'' provided Washington unfreezes Iranian assets in the US.

Although conflict among Iran's spiritual and governmental leaders still exists, and although a very limited amount of encouragement about the release of American hostages has been given, the fact remains that Iran is still led by those who believe in using terrorism as a bargaining tool.

Should positive changes in Iran's government eventually occur, HR 1515 would accommodate those changes.

Currently, the only groups of countries that do not enjoy MFN status with the US are the Soviet-bloc countries (with the exception of Hungary).

Other countries that have pursued foreign policy objectives antithetical to those of the US have had their MFN status suspended. The MFN status of Cuba was suspended in 1962. Cambodia and Laos had their MFN status suspended in 1976. The 1951 suspension of the MFN status of North Vietnam was extended to include South Vietnam after its takeover in 1975.

There is ample historical precedence for imposition of trade sanctions on countries that sponsor terrorism.

The State Department maintains a list of countries that sponsor terrorism in order to regulate transfer of US military equipment and assistance abroad. The time has come to impose economic sanctions on imports from these countries as well.

ECONOMIC sanctions can be effective against terrorist states. The Libyan economy has contracted every year since the imposition of certain product-specific economic sanctions by the US, although the lack of cooperation from other countries has limited the effectiveness of these sanctions somewhat. Libyan export income has fallen by billions of dollars.

Since about 40 percent of the earnings from oil sales goes to the Libyan military budget, dropping income undermines the financing of adventurism and terrorism. Libya is beginning to feel the pinch of a sharp economic downturn, although it still holds MFN status with the US.

Last year, Iran, by contrast, exported $1.6 billion in crude oil to the US, and the US imported $66 million in goods from Syria. It is senseless to give these countries the same trading preference we give to our friends such as Canada, Great Britain, and West Germany.

Losing MFN status would double the duty on Iranian crude oil, from 10.5 cents per barrel to 21 cents per barrel. Taking the MFN status away from Syria would triple the duty on Syrian tobacco from 11.5 cents per pound to 35 cents per pound. These increases alone would negatively affect the economies of both countries.

My legislation won't end the threat of terrorism by any means, but it would utilize American market power as a tool to thwart terrorist attacks against innocent Americans.

The US should not unconsciously continue to support terrorist countries. I believe countries that sponsor terrorism are no more worthy of MFN status than Soviet-bloc countries. Libya, Iran, Iraq, and Syria have done much to earn suspension of their MFN status.

As a matter of principle and policy the US should repeal all trade preferences to countries that condone plots to murder Americans and undermine our government. There should be a penalty for targeting Americans as terrorist victims.